As regulators prepare to rule on the future of a global aviation climate program, a growing number of experts and project developers are warning that the outcome could determine whether the system succeeds collapses.
The decision, expected from the Council of the International Civil Aviation Organization, will shape the supply of carbon credits available under CORSIA, the aviation sector’s emissions offsetting framework. The program was designed to generate steady demand for carbon credits, channelling investment into emissions reduction projects around the world.
Concerns have centered on recommendations from the CORSIA Technical Advisory Body, which some market participants say could significantly limit the pool of eligible credits. A narrower supply, analysts say, could lead to higher prices and increased compliance costs for airlines, potentially weakening support for the program.
“If the market becomes too constrained or uncertain, you risk eroding both supply and demand at the same time,” said one carbon market adviser, who requested anonymity because of the sensitivity of the issue.
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The potential consequences are particularly significant for Africa, where many countries have looked to carbon markets as a source of climate finance and economic development.
Across the continent, governments and private developers have invested in projects ranging from reforestation to clean energy and household technologies. Much of that investment has been underpinned by expectations of growing demand from compliance markets like CORSIA.
In Kenya, which has positioned itself as a regional hub for carbon market activity, the stakes are especially high. The country hosts a wide range of projects and has attracted international investment aimed at scaling emissions reductions while generating revenue.
If ICAO is unable to increase the supply of eligible units, airlines may invoke force-majeure, leading to the complete collapse of the mechanism.
In addition to being a devastating blow to global climate action, this would have direct impacts for Africa. Without access to CORSIA demand, the continent could see a wave of bankruptcies – depriving communities of much needed jobs, investment and resources.
Recent developments in the private sector have underscored those risks. KOKO Networks, a company that built a large clean cooking fuel distribution network in Kenya, faced financial difficulties after carbon credit revenues did not materialize as expected. While the company’s challenges were not solely tied to CORSIA, its experience has been widely cited as an example of how volatility in carbon markets can affect real-world investments.
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For policymakers, the episode highlights the broader implications of regulatory decisions. Carbon markets are increasingly seen not just as environmental tools, but as financial systems capable of supporting infrastructure, jobs, and development.
The ICAO Council’s forthcoming decision may therefore carry weight far beyond aviation. It will help determine whether CORSIA can provide the stable demand needed to sustain those investments or whether uncertainty will limit its impact at a critical moment for global climate finance.
